How to Start a Retail Business

Is Retail Right for You?

Is retail the right opportunity for you? Weighing several factors will help you answer that question. Personality, motivations, your strengths and weaknesses, money, and experience should be at the top of your checklist.

Making a good career decision involves both self-assessment and market research. Begin the self-assessment process by examining your skills and identifying what kinds of products or services you can offer. What skills do you most enjoy using? If you are artistic, merchandising a store and designing advertising may appeal to you. Or you may be mechanically inclined, enjoy solving puzzles or helping people. Therefore an auto parts store, business consulting practice or birthing coach business may be for you. By tying your skills to your market's wants and needs, you greatly increase the likelihood that your new business will be successful.

Personality

Many people successfully make the transition from being an employee to an employer, but many do not. Do you have what it takes to be in business for yourself? Even if you are suited to be a business owner, is a consumer-focused business for you? Are you better suited to be a wholesaler, distributor or manufacturer? Answer the following five questions honestly. Talk to your spouse, best friend or prospective partner about your answers as a reality check.

1. Are you good at multitasking? In your own business, you have to be willing and able to do everything yourself. When you work for someone else, you are usually responsible for just one thing and have limited control. You are supported by others with expertise or experience in different roles and functions. In retail, every day can be a stretch, as you encounter customers, employees, vendors and landlords. You can't say, "That's not my job." It's all yours.

2. What is your risk tolerance? In a startup retail business, you worry about being in the right place at the right time with the right goods and services for the right people at the right price. Do you adjust quickly to unplanned events or prefer more predictable, organized projects? Do you see risk as a threat or an opportunity?

3. Do you count on a paycheck? New business owners can rarely count on a regular paycheck. Startups frequently require more capital than planned. Something's bound to go wrong or change even though everything is penciled out in your plan. If you break out in a cold sweat if you aren't paid on the same day every month, you may want to rethink going out on your own. Most of the money you make will go right back into inventory and other costs of doing business.

4. Are you a self-starter and comfortable being alone? Or do you draw your energy from being around others and count on colleagues for support and advice? In your own business, you must lead, knowing what to do and when to do it, and be fully accountable for everything that happens. The buck stops with you. Sometimes that's a lonely place.

5. Do you value predictability or prize diversity? Not only are there laws against discrimination in hiring and business practices, but America is a multicultural society. When you open your store or service company, you will be interacting with a wide spectrum of customers, vendors, advisors and employees. Retailers need to be people-oriented, flexible and good-natured. Can you manage conflict, see things from others' point of view, and cater to their taste, not yours?

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